Analysis of Financial Fraud in Kangmei Pharmaceutical: Motivation, Governance and Strategy

DOI: https://doi.org/10.62517/jse.202411501

Author(s)

Wanru Huang, Zhuru Wu

Affiliation(s)

Institute of Accounting, Guangzhou College of Commerce, Guangzhou, China

Abstract

This paper examines Kangmei Pharmaceutical's financial fraud from 2016 to 2018, a significant case in traditional Chinese medicine. It outlines Kangmei's "big health" business model and reviews the fraud's timeline, media scrutiny, regulatory probes, and legal outcomes. The analysis identifies motives such as liquidity relief, operational pressure, and personal gain for management. The paper suggests governance strategies like steady development plans, diverse evaluation systems, and wider financing. It also assesses Kangmei's post-fraud actions, like management overhaul, business model shifts, performance systems, and partnerships, which helped restore reputation and drive transformation. The study offers insights into financial fraud complexity and lessons for listed companies' financial governance.

Keywords

Kangmei Pharmaceutica; Financial fraud; Motivation analysis; Governance; Strategy

References

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